New Form For Workers Misclassified as Independent Contractor
Several weeks ago I wrapped up a series on Independent Contractors and Employees. Until now, it has been up in the air about what those workers who are treated as independent contractors, but actually are employees should do. The IRS has generated a new form, Form 8919 which will give notice to the IRS of the amounts of employment tax that should have been paid on behalf of the employee by the employer.
When completing Form 8819, the employee must meet several criteria, namely:
- The worker has filed Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, and received a determination letter from the IRS stating they are an employee of the firm.
- The worker has been designated as a section 530 employee by their employer or by the IRS prior to January 1, 1997.
- The worker has received other correspondence from the IRS that states they are an employee.
- The worker was previously treated as an employee by the firm and they are performing services in a similar capacity and under similar direction and control.
- The worker’s co-workers are performing similar services under similar direction and control and are treated as employees.
- The worker’s co-workers are performing similar services under similar direction and control and filed Form SS-8 for the firm and received a determination that they were employees.
- The worker has filed Form SS-8 with the IRS and has not yet received a reply.
Filing this form will allow the IRS to provide information to Social Security to make sure you have been given credit on your Social Security record. Recently, the IRS has advised that misclassified workers should no longer use Form 4137 as they have in the past. This form is only used by employees who receive tips that are not reported to their employer.
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